Anglo Asian Mining Share Discussion Threads

[bleepy] 18/12/2016 21:35

The Ugur deposit area was defined from mapping and is a significant surface alteration rock assemblage with the presence of barite, barite-haematite, and limonite in gossan-style zones along with vuggy silica in brecciated volcanic rocks. These findings were established by 500 chip samples taken from outcrop, many of which contained gold. This alteration zone extends over an area of 1,000 metres (east-north-east by west-south-west) by 500 metres (north-west by south-east)

An initial Phase II core drilling programme designed on a grid for resource estimation has commenced, and will establish the overall depth and style of mineralisation.

A further geological exploration target has been defined in the expanded Ugur area based on similar alteration and geomorphological position to the Ugur deposit that is located about 1,500 metres to the south of the current Ugur RC drilling area. This will be further evaluated as part of the 2017 programme of field work.

[csmwssk12hu] 18/12/2016 20:38

Well that was a close test of 20p, still on the 20p to 34p trading range, rns wasn't liked for a simple reason, the size of find over area was far too small to sustain a long term operation, the issue here is declining production coupled with a declining gold price, only positive is declining local currency however if you think gold costs are now at $700 an ounce on last rns with costs what do you think costs will be with less production? If you tell the market you are going to deliver 77,000 ounces a year, then you are only going to produce under 70,000 ounces, more concerning the monthly rate of 4500-5000 ounces is only 54k to 60k what are your new cost per ounce going to be? The danger that the market seems to be waking up to is by the time current pit is exhausted will they have found enough minerals elsewhere to continue production? After Friday announcement that is looking less likely, even a gap of twelve months between production ending and production elsewhere starting could be devastating, it may not happen and everything may be fine, but that doubt is now out there imho dyor

[zhockey] 18/12/2016 20:37

That's plain wrong, the barren holes were on the margin and not just vein free within the main body! Read the RNS again. The upshot is that the areal extent is much less than it could have been, a mineralised core 225 by 130m

[obbig60] 18/12/2016 18:19

I'm no mining engineer, but I don't suppose anyone else here is either. So suppose you think there is some gold under your feet, how do you find out where it is? You drill lots of holes. The gold runs in veins, so if you are lucky some of your holes might intersect the vein. Most of them won't and will return nothing - but you now have a much clearer idea how much gold is down there and where it is.
So I don't find it surprising that 29 out of 35 holes returned no gold.

[zhockey] 18/12/2016 17:06

Robo,

The point is how much will we be producing in two years when the reserves are starting to deplete. Bill said a couple of times in interviews early this year that they can sustain the current gold production for 2-3 years. So that's two more years which would be consumed paying off debt. Beyond that, without and increase in reserves I'm not sure what level of production we would see.

Ugur was a great hope as AAZ need oxide ore to feed through the AL plant. The company are right to keep shareholders informed, however my interpretation is that they have focused on a small zone to get oxide ore into the plan as soon as possible. The upshot of that is that the prospective size is now less that expected/hoped by the market.

Hopefully they will find more economic mineralisation next year but you can understand why the market sold off as it now feels that based on the RNS Ugur is not going to be a major multi-million oz deposit.

[robo21] 18/12/2016 16:37

Lot of negativity on here this weekend.
Can someone remind me of the cash this
Is throwing of with all production costs
At 700 dollar an ounce ?

[zhockey] 18/12/2016 16:27

Guys come on, 29 barren holes out of 35, released on a Friday. It's a disappointment.

[jbe81] 18/12/2016 16:18

Truly bizarre that stumbling across some gold on surface is seen as a bad thing. Also Matt is in the middle of two deposits, maybe it is one deposit not 3. In no way negative at all.just a change in strategy from the company that will see regular release of drilling results IMO.

[mattjos] 18/12/2016 15:19

Zhockey ... to identify the resource, some of the holes will be barren else, maybe you think it's open on strike to Australia?Far too early in the process for you all to cry in your beer over work to date on it.For all we know, the grades get richer and richer down to 3,000m depth

[brasso3] 18/12/2016 14:18

Zhockey

Lets wait for the final results. I am not suggesting these preliminary results are indicating a potential 300k - 500k oz resource.

[zhockey] 18/12/2016 14:04

Matt, I think it's called adjusting to reality and you are not making any sense, 29 barren holes out of 35 is good??

In any case only bad news is released of Fridays so what does that tell you :)

Jeanesy has hit the nail on the head in terms of sentiment IMO.

@Brasso, based on those drill results do you think 300K is remotely possible, what is your logic?

[mattjos] 18/12/2016 11:38

Good grief. How quickly some can flip between euphoria and despondency here. There seems to be some sort of communal infectious depression setting in for no valid reason.As well the company is not reliant on some of you lot to run it! Drill results look fine to me at this stage of the exploration.Look forward to seeing what the results will show below 70m. Am quite sure it will prove to be a very useful source for the production plant at Gedabek.

[philo124] 18/12/2016 10:28

The fall in the price of Gold is the major cause for the retreat imo. The recent news was crystalised with this news, imo. I was surprised the share price wasn't nearer 20p
before the news.

[jeanesy] 18/12/2016 09:42

I have to agree ZHockey.The results were very disappointing and that is the reason for the fall. I would not be surprised if some longterm holders try and sell some of their stock now. The problem is unless there are buyers they will struggle to sell in any great numbers, and therefore i fear a drip drip aprroach will happen and the price will fall steadily over the coming weeks. How far this will fall depends on how much profit people will try and take. The next news we are to expect will be mid january. I fear the production this month will be very poor due to the low grades and severe winter weather which is now in the region. Yes the debt will be falling, but much more slowly than before due to the falling POG , lower production and costs of electricity link up and drilling/exploration costs. Yes the company is in a much better position than it was this time last year, when this was a screaming buy! I really dont think it is anymore atmo , unless of course we get some unexpected positive news!

[brasso3] 18/12/2016 04:36

Clearly the drilling results at Ugur are premature at present and more work is needed. In a stronger gold price environment this RNS would have been taken more positively. I do not think we needed Ugur to be a massive deposit as 300k - 500k would be very attractive so close to AAZs existing mining operations. If it can add 10k - 20k ounces of production a year to the current production that would do me.

[zhockey] 18/12/2016 00:42

Matt,

In my view the main reason AAZ did not collapse along with the gold price is that the market had hopes for multi-million oz exploration. Read back a month or so and many here were thinking Ugur had potential to be 1Moz based on the areal extent indicated. However this latest RNS has brought those expectations in significantly.

If you take the area of the mineralised core from the RNS and assume an average grade across the entire area of 1 g/t from surface to 60m. Then calculate the the rock mass, they say it is soft, so if we use an altered intermediate extrusive rock as a guideline, say 2 tonnes per cu metre, then we get about 95K oz? That's not much more than the sulphide stockpiles is it?

This company needs to find 2M oz+ in order to get to £1, so we are a long way off and Ugur does not look like "the one". And what of Bittibulag, it's gone quiet, are we to infer that there is nothing like Ugur to be worth reporting?

In the short term in looks like Gadir is struggling for grade and if this doesn't pick up then production next year will likely be what, only 50 - 60K oz?

I'm a holder and have been for a long time but I think a healthy dose of reality is needed here.

Please do your own research, the figures I have used here are my own personal assumptions so do your own modelling.

[mattjos] 17/12/2016 18:52

Can't help thinking there is some huge misunderstanding here at present.As pointed out, the company was not really under pressure to get anything out before the year end yet, have chosen to release a report about which they are clearly excited.It demonstrates the presence of gold on their doorstep, which continues from surface to deeper than first identified.Yet the market has interpreted the news completely the opposite of how the company seems to view it. Either the market expectations were far ahead of the reality or, the wording of the RNS's needs some clarification to get the message across correctly.

[jbe81] 17/12/2016 18:13

Ugur means luck, it got its name because AAZ stumbled across it due to there being gold on the surface. It is cheap, close to the existing plant and easy to mine, the amount of gold there will be proven up with time. All good news for the company.If you want outstanding grades you will get them from Bittibulag next year. And it is a significant deposit...
Penny for jbravo's thoughts, am sure he is even more optimistic than ever.

[unionhall] 17/12/2016 17:46

"..If the 6 core drilled holes are a sign and sample of the only partially drilled Ugur prospect.."


Clearly they are not - the other RC drilling has been dismal in comparison...

[bleepy] 17/12/2016 16:09

unionhall

"Initial Phase II core drilling programme has now confirmed an oxide zone to depth of about 60 metres"

Thank you for pointing that out. Only 6 holes have been core drilled and from those we have high grades of 8-9g/t proved up at fairly shallow depth with high grades below that depth. If the 6 core drilled holes are a sign and sample of the only partially drilled Ugur prospect then it's no wonder they have announced the discovery as significant.

[unionhall] 17/12/2016 11:47

"..As already mentioned the high/higher grades appear to lie at depth,,,"

You keep saying that, but the numbers don't seem to support that....


The highest grades appear

8g/t at 3 - 17 m

9g/t at 24 - 28 m

[celeritas] 17/12/2016 08:42

But at the end of the day the mkt cap is very very low for a producer of over 50k oz. The cost savings have been ignored of late.
What would azergold pay for them?

[jeanesy] 17/12/2016 08:27

A broker downgrade as well .. oh dear ! The weather is very very cold in the region as well atmo, which in the past has affected production. Some good news comes in the form of the manat continuing to weaken and the POG holding above 1130 is also a plus. I am trying to see the positives here at the moment but the recent news has knocked my confidence in my investment. The low grades being mined atmo is not helping and it would be encouraging to hear some news about whether this is to continue?

[ferries5] 17/12/2016 06:41

Do not have the note, But AAZ Downgraded by share price Angel from a buy to a hold and target price reduced from 25p to 22p.